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| Ikea to pay UK workers more than living wage in 2016 | Ikea to pay UK workers more than living wage in 2016 |
| (about 7 hours later) | |
| Swedish firm Ikea will become the first national retailer in the UK to pay staff above the government's new National Living Wage from next year. | Swedish firm Ikea will become the first national retailer in the UK to pay staff above the government's new National Living Wage from next year. |
| Ikea, known for its flat-pack, self-assembly items, said it would pay all its 9,000 UK workers at least £7.85 an hour from April 2016. | Ikea, known for its flat-pack, self-assembly items, said it would pay all its 9,000 UK workers at least £7.85 an hour from April 2016. |
| The rate for employees in London will be £9.15 an hour. | The rate for employees in London will be £9.15 an hour. |
| Chancellor George Osborne announced a a new compulsory living wage of £7.20 an hour in the Budget earlier this month. | Chancellor George Osborne announced a a new compulsory living wage of £7.20 an hour in the Budget earlier this month. |
| He said that employers must pay at least that much to workers aged 25 and over from April, with the rate rising to more than £9 an hour by 2020. | He said that employers must pay at least that much to workers aged 25 and over from April, with the rate rising to more than £9 an hour by 2020. |
| The existing minimum wage for those over 21 is £6.50 an hour. | The existing minimum wage for those over 21 is £6.50 an hour. |
| Ikea said it would instead pay all its UK workers - including those under 25 - the rate set annually by the Living Wage Foundation, making it the first national retailer to do so. | Ikea said it would instead pay all its UK workers - including those under 25 - the rate set annually by the Living Wage Foundation, making it the first national retailer to do so. |
| 'Huge step' | 'Huge step' |
| About half of its 9,000 UK employees will benefit from the decision. | About half of its 9,000 UK employees will benefit from the decision. |
| Rhys Moore, director of the Living Wage Foundation, said: "This is a huge step for the British retail sector and we hope that many other businesses will follow the leadership IKEA is showing on the issue of basic pay." | Rhys Moore, director of the Living Wage Foundation, said: "This is a huge step for the British retail sector and we hope that many other businesses will follow the leadership IKEA is showing on the issue of basic pay." |
| Following the Budget, the foundation welcomed the chancellor's decision, but described it as "effectively a higher national minimum wage and not a living wage". | Following the Budget, the foundation welcomed the chancellor's decision, but described it as "effectively a higher national minimum wage and not a living wage". |
| The move is expected to boost the wages of six million people in both the public and private sectors. | The move is expected to boost the wages of six million people in both the public and private sectors. |
| Business groups questioned Mr Osborne's decision, with Katja Hall, deputy director-general of the CBI, describing it as "quite a gamble", while the Association of Convenience Stores called it a "reckless measure". | Business groups questioned Mr Osborne's decision, with Katja Hall, deputy director-general of the CBI, describing it as "quite a gamble", while the Association of Convenience Stores called it a "reckless measure". |
| However, Simon Walker, director-general of the Institute of Directors, said the body believed that it was time for employers to increase wages. | However, Simon Walker, director-general of the Institute of Directors, said the body believed that it was time for employers to increase wages. |
| Ikea is the UK's biggest furniture retailer with 18 stores and plans to open more in Sheffield, Reading, Exeter and Greenwich in southeast London. | Ikea is the UK's biggest furniture retailer with 18 stores and plans to open more in Sheffield, Reading, Exeter and Greenwich in southeast London. |
| Although its UK sales rose 12% to £1.46bn in the 12 months to August 2014, pre-tax profits fell £5m to £41.8m. | Although its UK sales rose 12% to £1.46bn in the 12 months to August 2014, pre-tax profits fell £5m to £41.8m. |
| Last year Ikea said it would raise the minimum wage for its US retail employees by an average of $1.59 an hour to $10.76 (£6.89) in 2015. | Last year Ikea said it would raise the minimum wage for its US retail employees by an average of $1.59 an hour to $10.76 (£6.89) in 2015. |